In this article, we will look at the 10 Best Auto and Truck Dealership Stocks to Invest In.
An Outlook of the United States Automotive Sales
On December 20, Cox Automotive reported that November retail sales figures of used vehicles rose by nearly 2% from October, reaching approximately 1.4 million vehicles. The figure indicated a robust demand as it marks a 13% increase compared to November 2023. Scott Vanner, a senior analyst at Cox Automotive, noted that sales are performing stronger than typical seasonal patterns, which usually see a slowdown due to adverse weather and reduced selling days during the holiday season. The current year has defied these trends with double-digit growth year-over-year. In addition, certified pre-owned vehicle sales also saw a month-over-month increase of 2.7%, rising from 203,272 units in October to an estimated 208,708 units in November 2024. However, on a year-over-year basis, CPO sales were down 3.5%, attributed to fewer available off-lease and trade-in vehicles.
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Looking ahead to the current month, another report by Cox Automotive expects sales volume for December to be around 1.47 million vehicles, representing a 7.7% increase from the previous month but flat year-over-year. Moreover, December’s seasonally adjusted annual rate (SAAR) for new-vehicle sales is projected to be 16.5 million, marking an increase from 15.9 million in December 2023 and matching November’s figure. Charlie Chesbrough, Cox Automotive’s senior economist in a December 17 report noted that the end of the U.S. election season has contributed to a boost in sales. Buyers are motivated by concerns about upcoming potential policy changes and EV discounts that may not last, leading to a favorable buying environment as 2024 closes.
In terms of quarterly and yearly analysis, the fourth quarter is anticipated to finish with a SAAR of 16.4 million, representing a shift to a higher sales pace since October. The report attributes these movements to better inventory levels and increased consumer confidence topped with lower interest rates. On the other hand, full-year new vehicle sales for 2024 are expected to reach approximately 15.85 million units, reflecting a 2.3% increase from the last year. Lastly, the report forecasts that new vehicle sales will continue to grow in 2025, potentially reaching 16.3 million units, driven by ongoing improvements in consumer confidence and favorable market conditions.
With that let’s take a look at the 10 best auto and truck dealership stocks to invest in.
A wide view of a large auto dealership, its showroom packed with different types of cars.
Our Methodology
To curate the list of the 10 best auto and truck dealership stocks to invest in, we used the Finviz stock screener. Using the screener, we aggregated an initial list of auto and truck dealerships and sorted it by market capitalization. Next, we sourced the number of hedge fund holders for each stock from Insider Monkey’s third-quarter hedge fund database. The list is ranked in ascending order of the number of hedge fund holders.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Auto and Truck Dealership Stocks to Invest In
10. Rush Enterprises Inc (NASDAQ:RUSHA)
Number of Hedge Fund Holders: 17
Rush Enterprises Inc (NASDAQ:RUSHA) specializes in selling and servicing commercial vehicles, primarily trucks and buses. It operates through a network of over 200 dealerships known as Rush Truck Centers across the United States and Canada. Its services range from selling new and used trucks and buses to providing aftermarket parts for maintenance and repairs.
Although the company operates one of the largest networks of commercial vehicle dealerships in North America, it continues to face challenges from low freight rates and previously elevated interest rates which impacted sales. As a result, Rush Enterprises Inc’s (NASDAQ:RUSHA) revenue for the fiscal third quarter of 2024 declined 4.3% year-over-year to $1.9 billion.
On the bright side, management was able to sell 3,604 new Class 8 trucks, capturing 5.3% of the United States market and 1.6% in Canada. On the used trucks front it sold 1,829 trucks, marking a 1.8% increase year-over-year. Looking ahead, management still anticipates some seasonality affecting the fourth quarter, however, it expects a gradual return to normal market conditions by early 2025. It is one of the best auto and truck dealership stocks to invest in.
Carillon Chartwell Small Cap Value Fund stated the following regarding Rush Enterprises, Inc. (NASDAQ:RUSHA) in its Q2 2024 investor letter:
“Rush Enterprises, Inc. (NASDAQ:RUSHA) is the largest commercial vehicle dealer group in the United States, selling new trucks and operating a large, high-margin parts and service business. After the stock peaked on a relative basis at the close of the first quarter, sales and earnings disappointed investors amid weak industry sales due to low freight volumes and rates.”
9. ACV Auctions Inc. (NASDAQ:ACVA)
Number of Hedge Fund Holders: 27
ACV Auctions Inc. (NASDAQ:ACVA) is a technology-driven company that operates a digital marketplace designed specifically for buying and selling used vehicles among dealers. The company offers detailed and accurate information about the vehicles listed on its platform to help dealers understand how much a vehicle is worth and what condition it is in, before making a transaction.
The overall automotive market continued to face challenges with used vehicle inventories remaining below normal levels and retail sales of new and used vehicles relatively flat. ACV Auctions Inc. (NASDAQ:ACVA) remained focused on a growth strategy aimed at enhancing long-term shareholder value. One of the key components of its strategy entails the use of innovative technology to improve dealer experiences and operational efficiency. To achieve this, management introduced its AI-driven solution, ClearCar, which employs AI and real-time market data to provide accurate pricing based on vehicle conditions, thereby facilitating transparent interactions between dealers and consumers.
Moreover, management has also expanded its services to include logistics for vehicles purchased outside or at the ACV platform. Both of these initiatives are proving to be fruitful for the company as during the third quarter of 2024, it delivered $171 million in revenue which surpassed the high end of its guidance. The company sold 198,354 units during the quarter, indicating a 32% increase year-over-year, and also increased its GMV by 17% to $2.5 billion. Its transportation segment stood out and delivered a record revenue on the back of 108,000 vehicle transports during the quarter. Looking ahead management expects to generate $630 million to $634 million for the fiscal year 2024, indicating a 31% to 32% year-over-year increase.
Meridian Growth Fund stated the following regarding ACV Auctions Inc. (NASDAQ:ACVA) in its first quarter 2024 investor letter:
“ACV Auctions Inc. (NASDAQ:ACVA) operates a digital wholesale auction marketplace to facilitate business-to-business used car sales between sellers and dealers. It has disrupted the traditional physical used-car auction marketplace by attracting thousands of dealers to its online platform. ACV’s competitive advantage is its sizeable team of inspectors and the technology tools supporting this team. The depth and accuracy of ACV’s inspection reports provide buyers the confidence to bid aggressively, knowing that they are unlikely to contend with negative post-purchase surprises. Sellers are drawn to ACV due to its lower auction fees and large buyer base. The stock appreciated during the quarter on strong results and 2024 guidance that came in well ahead of expectations. After a challenging 2-year period characterized by low dealer inventories and high car prices, new and used car markets are showing signs of normalization. We expect ACV to continue growing market share and to generate higher margins as volumes return closer to normal (volumes remain approximately 40% below pre-pandemic levels). The company is also well positioned as the market continues to migrate from legacy physical auctions toward ACV’s more efficient digital platform. As fundamentals continued to improve during the quarter, we maintained a large position in the company.”
8. Penske Automotive Group, Inc. (NYSE:PAG)
Number of Hedge Fund Holders: 29
Penske Automotive Group, Inc. (NYSE:PAG) is an international company that focuses on transportation services, particularly in the automotive sector. It operates numerous car dealerships across various countries, including the United States, the United Kingdom, Canada, Germany, Italy, and Japan. It is also known as one of the largest retailers of commercial trucks in North America, specifically for Freightliner trucks.
The company differentiates itself from its competitors on the back of diverse operations in multiple geographic locations and retail automotive brand mix, where it generates 72% of its revenue from premium brands. During the fiscal third quarter of 2024, Penske Automotive Group, Inc. (NYSE:PAG) generated $7.6 billion in revenue, up 2% year-over-year. The company faced challenges in its Retail Automotive Dealerships segment with used vehicle sales declining by 13%, partly due to fewer trade-ins and lower availability from previous years. However, sales of new vehicles increased by 5% during the same time.
Management has been capitalizing on its stronghold over premium brands. On December 2nd, the company announced the acquisition of Porsche Centre Melbourne. The acquisition marks the third Porsche location in Melbourne and the 25th Porsche dealership worldwide for the company. Management expects this will bring $130 million in estimated annualized revenue taking its estimated annualized revenue from three dealerships in Melbourne to $260 million. It is one of the best auto and truck dealership stocks to invest in.
Black Bear Value Partners stated the following regarding Penske Automotive Group, Inc. (NYSE:PAG) in its first quarter 2024 investor letter:
“We have owned AutoNation and Penske Automotive Group, Inc. (NYSE:PAG) in the past but decided to consolidate our auto dealer investments solely into Asbury Automotive (ABG). AutoNation had gone thought a management transition and I wanted to see how the new team managed the business. They have done an excellent job and exceeded my expectations when it comes to capital allocation. As the stock looked very cheap, they bought 62% of the company coming out of COVID. As far as Penske is concerned, I think I made a mistake selling it as I undervalued a “hidden” asset in the Company that became more obvious over time. Asbury has taken on acquisitions and while the Company has done a good job, I would prefer to see how they manage the integration from the sidelines. We appreciate their stewardship and would consider buying back the stock later.
Penske is unique in that in addition to their domestic car dealerships they also own: auto dealerships in the UK, leading truck dealerships in the US, and ~29% of Penske Truck Solutions (PTS) a logistics/truck rental business (aka “the hidden asset”). The truck dealerships have always captured my attention as Parts/Service are an even larger chunk of the business than in autos (65-70% of profits for trucks). This is a very sticky, high-margin business that would trade at far higher multiples as a standalone entity. For accounting reasons, PTS is accounted for using the equity method which means their share of income comes below the operating income line and is often ignored or misvalued. Their share of PTS is conservatively worth $2.5-$3.5BB or 22-32% of the market cap of the entire company. The quality of PAG is not properly reflected in the share price. Management owns a lot of stock and seems to agree as the Company has bought back 17% of the Company in the last 2 years at attractive prices.”
7. CarGurus, Inc. (NASDAQ:CARG)
Number of Hedge Fund Holders: 29
CarGurus, Inc. (NASDAQ:CARG) is one of the best auto and truck dealership stocks to invest in. It operates one of the most visited online platforms that helps people buy and sell cars. The company functions through two main areas U.S. Marketplace and Digital Wholesale. It has a presence in the United States, Canada, and the United Kingdom.
The popularity and user traction the company generates from its online platform is one of its prominent competitive edges. During the fiscal third quarter of 2024, CarGurus, Inc. (NASDAQ:CARG) reached 42 million global monthly unique visitors, which as per management’s statistics is 58% more than its closest competitor. User engagement on its platform resulted in a 15% year-over-year growth in listings revenue. Management has been constantly updating its platform for more data-driven functionality and insights. It recently introduced several new reports such as the Next Best Deal Rating and Acquisition Insights report, which have been well-received by dealers. Nearly half of eligible dealers in the US are utilizing these insights, resulting in significant price adjustments based on recommendations.
CarGurus, Inc. (NASDAQ:CARG) expanded its Marketplace revenue by double-digit year-over-year growth for the third consecutive quarter. Fiscal third quarter 2024 Marketplace revenue for the company came in at $204 million, indicating a 15% increase. Management attributed revenue growth to new dealer ads globally, migration towards higher subscription tiers, and greater adoption of value-added products and services.
Meridian Small Cap Growth Fund stated the following regarding CarGurus, Inc. (NASDAQ:CARG) in its fourth quarter 2023 investor letter:
“CarGurus, Inc. (NASDAQ:CARG) is at the forefront of the online automobile sales industry, operating a web-based retail marketplace and holding a 50% stake in an online auction wholesaler. The marketplace business is unique in that it presents buyers with an unbiased list of available vehicles ranked on their value— a combination of the price and quality of the vehicle. Meanwhile, dealers are drawn to CarGurus.com’s attractive pricing and extensive suite of ancillary services. During the quarter, the stock appreciated as the company reported accelerating marketplace growth, up 8% from 4% in the previous quarter. The acceleration was primarily driven by rising inventory on dealer lots, which is forcing dealers to advertise to stimulate demand for the first time post-COVID. CarGurus also has been successful in passing through price increases, as price breaks provided during COVID are coming off the books and the company is the lowest cost source of leads for dealers. The company announced during the quarter that it would be buying the remaining stake in CarOffer, its auction-based wholesaling business. We believe the price, which is based on a depressed 2023 valuation, provides excellent value for CarGurus shareholders. We continue to believe in the long-term fundamentals of the company and maintained our position during the quarter.”
6. Asbury Automotive Group, Inc. (NYSE:ABG)
Number of Hedge Fund Holders: 30
Asbury Automotive Group, Inc. (NYSE:ABG) is a major automotive retailer in the United States, primarily engaged in selling vehicles and providing related services. The company operates around 154 dealerships that sell both new and used vehicles from various brands, including American, European, and Asian manufacturers. In addition, it also offers a range of repair and maintenance services including vehicle repair, replacement parts, and collision repair services.
While the company faced challenges from inventory level normalization, brand challenges, and the hurricane, it was still able to deliver robust performance across the board. During the fiscal third quarter of 2024, Asbury Automotive Group, Inc. (NYSE:ABG) delivered $4.2 billion in revenue, up 16% year-over-year. The growth was driven by a 16% increase in new vehicle revenue and a 13% increase coming from its Parts and Service segment.
Madison Mid Cap Fund announced adding Asbury Automotive Group, Inc. (NYSE:ABG) to its portfolio in its Q3 2024 investor letter, stating that such companies tend to earn more profits from their parts and services segments in periods of tough economic cycles. The anticipation stood true for the company as during the third quarter while sales of new and used vehicles were up 16% and 13% respectively, gross profits decreased 11% and 6% at the same time. However, the Parts and Services segment gross profits improved by 16%, thereby neutralizing the overall gross margin decrease to only 142 bps year-over-year. It is one of the best auto and truck dealership stocks to invest in.
Madison Mid Cap Fund stated the following regarding Asbury Automotive Group, Inc. (NYSE:ABG) in its Q3 2024 investor letter:
“During the quarter we added three new holdings: Graco, Lithia Motors, and Asbury Automotive Group, Inc. (NYSE:ABG). We purchased shares in Lithia Motors and Asbury Automotive, two of the largest auto franchise dealer groups in the country, owning a diversified portfolio of dealerships ranging from Toyota to Ford to Mercedes. Investors tend to pay a lot of attention to the level of new car sales, but dealers actually earn more in profits from parts and service than they do from selling new cars, and this steady business provides a nice ballast throughout the economic cycle. In addition, we believe these businesses have a long runway to create value via consolidation of this fragmented industry, as the advantages of scale are increasing.”
5. AutoNation, Inc. (NYSE:AN)
Number of Hedge Fund Holders: 32
AutoNation, Inc. (NYSE:AN) is a major automotive retailer in the United States, primarily involved in selling both new and used vehicles. The company operates through three main segments including Domestic, Imports, and Premium Luxury, selling vehicles ranging from American automakers like General Motors to luxury brands such as Mercedes-Benz and BMW. In addition to selling vehicles, the company also offers automotive repair and maintenance services and arranges financing for vehicle purchases.
AutoNation, Inc. (NYSE:AN) faced challenges due to a cyberattack on CDK Global, which is a major software provider for the automotive industry. As a result, its revenue of $6.6 billion decreased 4% year-over-year. The gross profit also took a hit and dropped 9% year-over-year to $1.2 billion, however, the gross profit showed a sequential improvement of +2% led by Customer Financial Services (CFS) and After-Sales growth.
Despite the headwinds, management was still able to increase its market share in new vehicle sales, achieving a 2% growth in same-store units across all segments. It also strategically divested eight underperforming stores during the quarter, generating over $150 million in proceeds. This decision was part of a strategy to optimize their portfolio and take advantage of favorable market valuations before they declined. Looking ahead, AutoNation, Inc. (NYSE:AN) anticipates improved performance in the fourth quarter, particularly in new vehicle sales. The company is also optimistic about moderating interest rates and plans to leverage capital for acquisitions that promise higher returns for shareholders.
Conventum – Alluvium Global Fund stated the following regarding AutoNation, Inc. (NYSE:AN) in its Q2 2024 investor letter:
“AutoNation, Inc. (NYSE:AN) (down 3.7%) operates around 350 dealer franchises across the US, as well as collision centres and used vehicle stores. When compared to Group 1, it sells more units at a slightly higher price and margin, and derives around 50% more revenue. But its strategy is different, with nationwide branding and centralised operations. Although we prefer the Group 1 model, the economics of Autonation look attractive to us. And by introducing this into the portfolio we could thereby invest more than 5% of assets in this sector without necessitating the sale of other attractive large positions. And so after selling a little Group 1 and buying Autonation we ended the quarter with 4.1% and 1.9% positions respectively.”
4. Group 1 Automotive, Inc. (NYSE:GPI)
Number of Hedge Fund Holders: 40
Group 1 Automotive, Inc. (NYSE:GPI) ranks 4th on our list of best auto and truck dealership stocks to invest in. It operates as an international car retailer, primarily in the United States and the United Kingdom. The company owns about 260 dealerships and 338 franchises and also operates an omnichannel platform called AcceleRide.
Conventum – Alluvium Global Fund in its Q3 2024 investor letter mentioned that Group 1 Automotive, Inc. (NYSE:GPI) has proved to be resilient within a challenging market characterized by CDK outage and the hurricane. Management has been busy growing its dealership network in the UK and the United States. On August 1, it announced the acquisition of Inchcape’s retail operations, adding 54 dealerships which will generate an estimated $2.7 billion in annual revenue. In addition, the company also acquired four Mercedes-Benz dealerships, expected to contribute around $105 million in revenue, and a large BMW store in Lincoln, projected to add approximately $125 million.
During the fiscal third quarter of 2024, Group 1 Automotive, Inc. (NYSE:GPI) generated an all-time quarterly high of $5.2 billion in revenue, indicating an 11% increase year-over-year. Revenue growth was driven by a record 53,775 new vehicle units sold during the quarter, representing an 18.6% increase year-over-year. Management remains confident regarding its prospects due to its growing footprint in both the US and UK markets.
Conventum – Alluvium Global Fund stated the following regarding Group 1 Automotive, Inc. (NYSE:GPI) in its Q3 2024 investor letter:
“Group 1 Automotive, Inc. (NYSE:GPI) was up 29.0%. Its second quarter results appeared to be above market expectations. We mentioned in our last report that US car dealers were heavily affected by the CDK software outage, but it seems Group 1 fared better than most. And now, with the 54 Inchcape dealership acquisition about to close (which will double its UK size and add USD 2.7b to revenue), we have updated our analysis. The result? Well despite becoming a larger entity with an expected 25% increase in revenue and 30% increase in earnings, there is negligible change to our valuation. Notwithstanding, we have no reason to doubt management’s confidence in the merits of the transaction. The numbers do not always tell the full story (or even part of it), and to us it makes sense to build scale in the UK. After the price gain, the business now trades at a small premium to our valuation. Not enough, in our view, to warrant major selling but when it reached 5.0% of the Fund we sold a little (to end the quarter at 4.2%) and we increased our position in Autonation (up 12.3%) which we consider slightly cheaper.”
3. Lithia Motors, Inc. (NYSE:LAD)
Number of Hedge Fund Holders: 43
Lithia Motors, Inc. (NYSE:LAD) is a major automotive retailer that operates a wide network of dealerships and offers various services related to vehicle ownership. As per its third quarter report for fiscal 2024, the company has more than 99,000 vehicles in 467 stores across the United States, Canada, and the United Kingdom.
The company’s management has been focused on expanding its dealership network. On September 10, Lithia Motors, Inc. (NYSE:LAD) reported expanding its retail network in Florida by acquiring three dealerships from Duval Motor Company, located in Jacksonville and Gainesville. These dealerships are expected to generate over $200 million in annualized revenue, significantly boosting Lithia’s presence in the region.
During the fiscal third quarter results of 2024, the company reported record revenues of $9.2 billion, marking an 11% increase from $8.3 billion in the same quarter of 2023. In addition, management has been focused on improving its cost efficiency. It successfully reduced its adjusted Selling, General, and Administrative (SG&A) expenses from 67.9% of gross profit in the second quarter to 66% in the third quarter of 2024. The company has achieved $200 million in annualized cost savings, surpassing its initial target of $150 million. It is one of the best auto and truck dealership stocks to invest in.
Appalaches Capital stated the following regarding Lithia Motors, Inc. (NYSE:LAD) in its Q3 2024 investor letter:
“Lithia Motors, Inc. (NYSE:LAD) reported earnings, which were expectedly weaker year-over-year, but results were still better than feared. The shares have run up quite a bit since our initial purchase, but we still own them at a price at which I believe is a significant discount to their intrinsic value.”
2. CarMax, Inc. (NYSE:KMX)
Number of Hedge Fund Holders: 44
CarMax, Inc. (NYSE:KMX) is a leading retailer of used cars in the United States, known for its straightforward and customer-friendly approach to buying and selling vehicles. The company operates primarily through two segments including CarMax Sales Operations and CarMax Auto Finance (CAF).
During the fiscal third quarter of 2025, CarMax, Inc. (NYSE:KMX) experienced year-over-year gains in retail and wholesale figures, as well as in its auto finance operations. Management attributed growth to a more stable environment for vehicle valuations, which helped improve earnings per share (EPS) significantly. Despite a decline in average selling prices, which went down about $1,100 per unit or 4% year-over-year, the company maintained strong profit margins. Its retail gross profit per used unit was $2,306, slightly up from the previous year.
Management has been enhancing its omnichannel retail sales experience. The efforts resulted in online retail sales accounting for about 15% of total retail unit sales, indicating a slight improvement year-over-year. The improvement led to revenues from online transactions reaching approximately 32% of net revenues. It ranks 2nd on our list of best auto and truck dealership stocks to invest in.
Madison Mid Cap Fund stated the following regarding CarMax, Inc. (NYSE:KMX) in its Q3 2024 investor letter:
“We trimmed our positions in Moelis and CarMax. We reduced our position in CarMax, Inc. (NYSE:KMX) coincident with our addition of the two automotive retailers. While we are positive on CarMax’s prospects, we want to ensure we manage our portfolio’s overall exposure to the new and used car markets.”
1. Carvana Co. (NYSE:CVNA)
Number of Hedge Fund Holders: 66
Carvana Co. (NYSE:CVNA) operates an online platform for buying and selling used cars. It stands out due to its innovative use of technology including 360-degree imaging technology that provides detailed views of each car allowing customers to inspect the vehicle virtually. It also offers same-day home delivery and pick up from one of its unique vending machines, once a purchase is made.
The company reported an exceptional third quarter in 2024, achieving record financial performance across several key metrics, despite operating in a challenging automotive market. Management noted that over the last two and a half years, they have implemented strategies to enhance operational and financial efficiencies, allowing it to grow rapidly while maintaining profitability. During the quarter, Carvana Co. (NYSE:CVNA) sold 108,651 retail units, up 34% year-over-year, while total revenue reached $3.655 billion indicating a 32% increase during the same time.
As a result of management’s efforts, these sales figures came in with record income growth. The company reported a record Adjusted EBITDA margin of 11.7%, which as per the management is a new all-time best for public automotive retailers. Carvana Co. (NYSE:CVNA) attributed growth to its improved customer experience, expanding inventory selection, and increased brand awareness. Moving forward, management plans to invest an additional $5 million to $10 million in advertising in the 4th quarter to further expand its reach. It is the best auto and truck dealership stock to invest in now.
Optimist Fund stated the following regarding Carvana Co. (NYSE:CVNA) in its Q3 2024 investor letter:
“Carvana Co. (NYSE:CVNA) continues to perform well with unit growth accelerating from mid-teens in Q1 to over 30% in Q2, while achieving double the adjusted EBITDA margins of the automotive retail sector. It remains our largest position.”
While we acknowledge the potential of Carvana Co. (NYSE:CVNA) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CVNA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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